Even the most successful businesses become stagnant. Clients move on, customers lose interest in a product, and employees find bigger or better opportunities.
The key to long-term business success is focusing on improvement. No matter how well you’re doing today, an even better version of your company is still to come.
Performance management guides the process of improvement. Performance management programs optimize employees’ work and, in turn, the work of the company. If this sounds a bit vague to you, that’s OK. The performance management definition itself is ambiguous, meaning there’s room for you to define what this looks like at your company.
We’ll get you started by showing you some best practices for performance management and sharing the basic steps to take when implementing an improvement program. It’s time for your business to become the best version of itself.
Performance management best practices
Since there’s no one way to approach a performance management process, you have the exciting opportunity of tailoring it to your organization. But that potential can feel like a heavy responsibility. If you’re wondering where to start or what your strategy should include, look to the following best practices for guidance.
Determine key results
Determine objectives and key results (OKRs). A great way to approach any improvement program is to define your desired outcome. Then, you can work backward. Plus, setting a clear goal allows you to track progress. Set measurable but flexible goals so you can easily track your success metrics and shift course if necessary. The action plan might change, but the end result will likely be the same.
Set short-term goals
You may have a clear understanding of what goals you want your company to reach, but support individuals in setting their own. All individuals’ work powers the organization's success, and a company is only as strong as the weakest link. This means one of the best ways to reach company goals is by helping employees develop and set milestones for themselves. Reaching goals is also motivating and will inspire them to keep working toward more progress.
Specify roles
Who’s going to put your performance management process into place? Your employees. And your job is to guide them. Start by making sure they know what role they’ll play in the improvement plan and at the company. Make it clear who they’ll report to and what you’re expecting of them.
Create continuous feedback loops
Don’t wait for employee performance review season to roll around before providing feedback. Check in constantly, and remember that feedback is a circular process. When managers are the only ones giving feedback without listening to their employees, those managers miss out on essential information that could help them identify roadblocks in company processes.
And when you do have comments for employees, give actionable feedback. Focus on keeping the person on an improvement course by describing how they can do better instead of scolding them and highlighting what they did wrong.
Recognize achievements
Employees are the driving force behind your company’s success. Recognize the people that help you pull off your objectives by publicly rewarding them for their outstanding work with kudos and compliments. “Public” could mean acknowledging them in a company-wide email or a shout-out on your messaging app.
Monitor constantly
Tracking progress is the only way to know if you’re moving in the right direction before it’s too late. Have employees and their managers monitor performance and track milestones they hit on the way to achieving organizational goals. Weekly or biweekly check-ins are a great way to collect this information without hounding employees for updates.
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How to implement an effective performance management system
If you understand what a performance management initiative may look like and feel ready to try your hand at implementing one, start with the following steps:
1. Plan
You need a solid methodology to see your performance management program through. Set overall goals and a timeline, and have each employee set individual goals. Define progress metrics so that in the next step, you have a way of monitoring your progress. Set deadlines and examine what technology or resources you’ll need to meet them.
2. Monitor
This may be the second step listed here, but it’s a continuous step. Constantly evaluate progress against milestones and ask for feedback to better monitor the performance management of employees.
3. Coach
Solicit and appreciate employees’ feedback, and help them overcome obstacles and do their best work. Offer constructive feedback, training, and new tools as needed. Remind employees to continually look for areas of opportunity.
4. Reward
As you reach milestones, congratulate your employees. If an individual was particularly beneficial to the operation, thank them personally and publicly for their efforts. When the team completes a step of the project, take time to celebrate as a group to boost morale and remind everyone you appreciate their efforts.
Benefits of implementing a performance management plan
The number-one advantage of implementing a performance management model is improving the company’s results and modes of working. And there are some secondary benefits from this process, but they can be just as rewarding as fulfilling your goals:
- Performance management increases employee engagement. People work better when they know what they’re working toward. In a performance management plan, your employees clearly understand how their roles contribute to the big picture. Generating this awareness can help employees focus on their roles.
- You can retain and grow talent. Rewarding employees for their work is a critical factor in performance management plans that helps individuals feel valued. Showing that you value your employees encourages them to stick around, increasing retention rates. Plus, your employees are improving their skills as they work through the performance management plan, meaning you’re creating a skilled team that understands the company’s mission.
- Companies achieve results faster. A little organization goes a long way. Implementing a performance management plan forces you to identify areas of opportunity or roadblocks in the company and set goals to address them.
Boost your organization’s efficiency
No matter what your company does, you’ll benefit from focusing on how you can improve. Optimizing your efficiency will open up opportunities for growth that offer more areas for improvement, creating a performance management cycle.
If your business is just starting out, Practice can add some efficiency by streamlining your customer relationship management. Get started today.
